The provided text details a complex situation involving a failed ski resort development, powder Summit, in Utah, and its connection to the EB-5 visa program. Here’s a breakdown of the key points:
The EB-5 Program and Ski Resorts:
The EB-5 program allows foreign investors to obtain U.S. residency by investing in businesses that create jobs.
It has been a significant source of capital for real estate developers, with ski resorts being a notable niche.
The program underwent regulatory changes in 2022 to increase oversight.
Powder Summit’s EB-5 Funding:
In 2016,Powder Summit partners secured a loan agreement for up to $120 million in EB-5 funding.
The terms were designed to encourage matching capital from other sources.
The fund was managed by Mountain States Center for Foreign Investment (Utah’s first EB-5 regional center), with KT Capital as the fund manager and Cottonwood as the loan servicer.
Crucially, the loan included a completion guarantee and recourse indemnity.
Powder Summit’s Downfall:
Despite raising $42 million, primarily from Chinese families, Powder Summit failed to deliver on its promises of 80 condos, townhouses, and 214 hotel keys. They managed to build a road and some structures but stopped making loan payments in January 2019.
The debt became due in June 2021, and workout talks failed, leading to a default notice later that year.
Litigation and New Ownership:
Powder Summit sued its EB-5 lenders, attempting to delay debt obligations through litigation.
The EB-5 investors successfully defended against powder Summit’s claims and filed counterclaims.
While the case was still in the Utah Supreme Court in 2023, Hastings acquired the development.
Summit Mountain Holding Group’s stance:
A spokesperson for Summit mountain Holding Group stated that the pending litigation predates the current ownership’s acquisition.
They emphasized that no individual owner is personally liable for the company’s potential obligations.
The spokesperson also claimed that the litigation will not impact Powder Haven’s (presumably the new name or a related entity) development timeline.
* Hastings’ firm is seeking to dismiss the lawsuit.
In essence, the article highlights a case where a real estate development project, funded through the EB-5 program, failed to materialize, leading to a legal battle between the developers and investors.The situation is further complicated by a change in ownership, with the new owners asserting that the litigation is a legacy issue.